US stocks reversed early gains and Treasury bonds sold off late on Wednesday after the Federal Reserve sent a rather hawkish message to markets, minutes from its most recent meeting revealed.
The US central bank said the US expansion was to gain further momentum - with several Fed staff raising their growth forecasts - thanks to a global economic recovery and an expected boost from US tax cuts.
A key piece of text from the Fed minutes indicated that the interest rate response from policymakers would likely be more aggressive than many in the markets had previously expected.
It said: "A majority of participants noted that a stronger outlook for economic growth raised the likelihood that further gradual policy firming would be appropriate."
This was the first time the term "further" had been used in a Fed policy statement when referring to rates.
Markets were moved, but the reaction was less intense than that following inflation data earlier this month that helped trigger the recent equity market correction.
Stocks had been higher before the Fed minutes were released, but turned lower as investors examined the implications of the statement.
But the losses were not exacerbated by the wholesale sell-off seen earlier in the month. The Dow Jones Industrial Average fell just 0.67%, while the S&P 500 fell 0.55% and the Nasdaq 0.22%.
The bigger sell off came in the US bond market, which sent yields higher. The yield on the benchmark 10-year Treasury rose 6.3 basis points to 2.95% - its highest in four years. The two-year yield rose 2.4 basis points to 2.27%.
Stock markets in Europe appeared to be reacting negatively to the losses seen on Wall Street overnight. The EuroStoxx 50 index fell 0.45% in early trade.
Frankfurt's Xetra Dax index fell 0.68%, the CAC 40 in Paris shed 0.4% and the AEX index in Amsterdam lost 0.57%.
In Asia, the picture was more mixed, making it difficult to say whether the reaction crossed the Pacific, or that some Asian stocks were just having a bad day.
Tokyo's Nikkei 225 lost 1.18% and the Hang Seng in Hong Kong shed 1.2%. However, Shanghai's composite index rose 2.17% and Sydney's S&P/ASX 200 rose 0.12%.